Ideal daily minimum wage in Mexico: MXN$353, according to study

In order to overcome poverty in the country, daily minimum wage in Mexico should be MXN$353, according to a study by the Iberoamericana University
Streets of Mexico City – Photo: Alejandro Acosta/EL UNIVERSAL
07/01/2018
11:00
Teresa Moreno
Mexico City
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In order for Mexican families to be able to overcome poverty, the daily minimum wage (DMW) in the country should be MXN$353 (roughly USD$18) for a working day, according to a study by the Iberoamericana University.

In the report “Persistent Poverty in Mexico, Job Markets with Low Wages,” researchers from the Research Institute on Equitable Development talk about the need to have a daily minimum wage in Mexico that is able to exceed the poverty line, not only of the individual earning the wages but of a family comprised by four members, pursuant to that set forth by the Mexican Constitution.

If minimum wages are equal to the poverty line, as it currently happens with the DMW at MXN$88.32 (roughly USD$4.5), we have “poverty wages”, which only ensure the majority of the population remains in the poverty limit.

“The Constitutional provisions and supplementary laws clearly establish that a minimum wage is a concept of dignity and sufficiency for the head of the family and their family, nor for a single individual. Therefore, the minimum earnings of a family of four, pursuant to the Constitution, should be MXN$19,041 (USD$988 approx) per month, equivalent to MXN$4,760 (USD$248 approx) earned per each of the members,” says the report, published as part of the Situation Report of the Inequality and Poverty Network of the Association of Universities Sponsored by the Society of Jesus in Latin America.

“If daily minimum wages were MXN$95.4 [USD$4.9] instead of MXN$88.32 [USD$4.5] as it currently is, it would be enough to support the minimum needs of an individual and keep them from poverty yet it would not be enough to support a family. To support a family, the amount should be MXN$353, [USD$18],” according to the report.

The report, prepared by researchers Graciela Teruel, Miguel Reyes, and Miguel López was published in December 2017 and points out that in the past 25 years income of employees has remained “virtually the same” since in 1992 53.8% of the population was below the poverty line, while in 2016 – year analyzed during the study – a little over 50% of Mexicans are in this situation as there are no public policies to protect them in this regard.

“There are no wage or job policies tied to social policies that allow workers and employees to leave poverty indefinitely and not just temporary. Wages in Mexico continue losing purchasing power, a situation which contributes to 51.7% of workers to remain below the poverty line,” explains the study.

Under the current administration, average and minimum wages have lost 14.4% and 3.9% of their purchasing power, respectively.

The sixth round of talks to revamp the North American Free Trade Agreement (NAFTA) will take place from January 23 to 28, and since 1997 both, the United States and Canada stated Mexico's cheap labor and low wages were a threat to their respective economies.

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